Before the Watergate scandal, Teapot Dome was regarded as the "greatest and most sensational scandal in the history of American politics".[1] It damaged the reputation of the Harding administration, which was already severely diminished by its controversial handling of the Great Railroad Strike of 1922 and Harding's veto of the Bonus Bill in 1922.[2] Congress subsequently passed legislation, enduring to this day, giving subpoena power to House and Senate for review of tax records of any US citizen without regard to elected or appointed position, nor subject to White House interference.[3]

The lease terms were very favorable to the oil companies, which secretly made Fall a rich man. Fall had received a no-interest loan from Doheny of $100,000 (about $1.4 million today[5]) in November 1921. He received other gifts from Doheny and Sinclair totaling about $404,000 (about $5.67 million today[5]). This money changing hands was illegal, not the leases. Fall attempted to keep his actions secret, but the sudden improvement in his standard of living was suspect.

In April 1922, a Wyoming oil operator wrote to his Senator, John B. Kendrick, angered that Sinclair had been given a contract to the lands in a secret deal. Kendrick did not respond, but two days later on April 15, he introduced a resolution calling for an investigation of the deal.[6]Republican Senator Robert M. La Follette Sr. of Wisconsin led an investigation by the Senate Committee on Public Lands. At first, La Follette believed Fall was innocent. However, his suspicions were aroused after his own office in the Senate Office Building was ransacked.[7]

Albert B. Fall was the first U.S. cabinet official sentenced to prison.

Democrat Thomas J. Walsh of Montana, the most junior minority member, led a lengthy inquiry. For two years, Walsh pushed forward while Fall stepped backward, covering his tracks as he went. No evidence of wrongdoing was initially uncovered, as the leases were legal enough, but records kept disappearing mysteriously. Fall had made the leases appear legitimate, but his acceptance of the money was his undoing. By 1924, the remaining unanswered question was how Fall had become so rich so quickly and easily.

Money from the bribes had gone to Fall's cattle ranch and investments in his business. Finally, as the investigation was winding down with Fall apparently innocent, Walsh uncovered a piece of evidence Fall had failed to cover up: Doheny's $100,000 loan to Fall. This discovery broke open the scandal. Civil and criminal suits related to the scandal continued throughout the 1920s. In 1927, the Supreme Court ruled that the oil leases had been corruptly obtained. The Court invalidated the Elk Hills lease in February 1927, and the Teapot Dome lease in October. Both reserves were returned to the Navy.[8]

In 1929, Fall was found guilty of accepting bribes from Doheny. Conversely, in 1930, Doheny was acquitted of paying bribes to Fall. Further, Doheny's corporation foreclosed on Fall's home in Tularosa Basin, New Mexico, because of "unpaid loans" that turned out to be that same $100,000 bribe. Sinclair served six months in jail on a charge of jury tampering.[9]

Although Fall was to blame for this scandal, Harding's reputation was sullied because of his involvement with the wrong people. Evidence proving Fall's guilt only arose after Harding's death in 1923.[10]

Another significant outcome was the Supreme Court's ruling in McGrain v. Daugherty (1927) which, for the first time, explicitly established that Congress had the power to compel testimony.[11]

The oil field was then idled for 49 years, but went back into production in 1976. After earning over $569 million in revenue having extracted 22 million barrels (3,500,000 m3) of oil over the previous 39 years, in February 2015, the Department of Energy sold the oil field for $45 million to Standard Oil Resources Corp.[8]